Collaborative Business Commerce considers how you buy, how you sell, and how you manage cash not just within the four walls of your business but with your trading partners. At the heart of business commerce is the contract, representing the relationship between those trading partners. In this session, learn from thought leaders on how automation has helped them make contract management a key imperative and strategic differentiator for their company in not only containing costs, but in adding bottom-line business value.
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According to Aberdeen estimates, around 2.2% of the average enterpriseās savings are lost due to savings leakage out of a possible 5.4% of negotiated savings from the surveyed strategic sourcing groups. That equates to almost 41% of lost negotiated savings! Why is this occurring? Contract utilization has long been the Achilles heel between negotiated savings and what budget owners and CFOs actually experience at the end of the year. The Hackett Group estimates an average of $9.4M for every $1B in spend of lost savings due to contract non-compliance, and that figure can be as high as $18.8M for some companies. This results in a sizeable opportunity for P2P managers to capitalize on enterprise value. From a competitive standpoint, there is a 26% gap in spend between organizations that drive the highest levels of contract compliance versus the bottom quartile. Aberdeen. (2010). Strategic Sourcing: The 2010 Guide to Driving Savings and Procurement Performance. Aberdeen.The Hackett Group. (2008). Purchase-to-Pay Alignment: The Missing Link to Delivering on Spend Cost Reduction. The Hackett Group.